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Trump Toys with Tariffs Again: to the Tune of $4B Aimed at Eurozone

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Using Aircraft Subsidies as Pretense to Hit Autos, Cheese, Whisky and More…

Coming on the heels of a “surprise” temporary reduction in trade tensions with China, the list of affected goods in the tariff threat also includes 89 items, such as, olives, ham, coffee, wine, some seafood and metals.

Although the prospect of a new major front in the global trade war is one to be wary of, Trump is beginning to show his hand: in using threats and then trying to milk the negotiating phase, for a potential stock market boost which is then attributed to reductions in tension. Perfect example at hand is the one that boosted the markets yesterday after the meetings with President Xi Jinping around the G20 Summit in Osaka, Japan.

Never mind that, as we reported on May 23rd, it was obvious that he (and Xi) would use the date-certain G20 to claim a temporary “victory” and try and boost stature (and the Markets) with a removal (that could also be temporary) of the additional $350 billion, previously scheduled to be levied.

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May 23th, 2019: In a possible set up for both to appear to “rescue” their respective countries from this toddler-made crisis, a potential meeting at the G20 Japan summit, set to begin on June 28th, has been mentioned by the Trump administration.

Next Phase? European Front to Trade War

In May, 2018, Donald “Trade wars are good” Trump’s 25% tariffs on European steel and 10% on aluminum took effect. The European response was to impose steel import limits.

Behind it all, purportedly, are the aircraft subsidies given to Boeing and Airbus, respectively. Each of the two massive aircraft manufacturers received subsidies in the USD billions, according to the WTO.

In Trump’s about-face at the G20, he stated that the China negotiations are “right back on track”, although this, along with the original escalation that was an obvious ploy, can change at any time again, in a Queens heartbeat. Details of any progress on the agreement for Beijing to initiate economic reforms demanded by the US administration are currently unknown.

While Trump’s obsession with the stock market may serve him now, with many US indices at or near all time highs, if and when a dip occurs, especially coming in the ramp up into the 2020 elections, his tune will have to change in a hurry.

If the market does take a dive, look for him to find a scapegoat, or god forbid, start a war, not just a trade war, in order to distract from the suddenly unfavorable reflection on him. Crowing about stock market levels has traditionally not been a Presidential habit, for good reason, as, factually, bear markets always follow bull markets, sooner or later. Right now, it’s just a question of when. Trade wars will be an obvious explanation for any significant downturn, and that will undoubtedly be like the chickens coming home to roost, at long last.


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